Distinct Business Entity

DEFINITION of 'Distinct Business Entity'

A sub-division within a company that is completely autonomous from the rest of the company. The distinct business entity will have complete control over how it utilizes its assets, organizes its management and the most appropriate financing structure if required.

BREAKING DOWN 'Distinct Business Entity'

A distinct business entity will most likely be segregated from the rest of the company based on some operational distinction, such as having a separate product line, being geographically segregated or by offering a different service then the rest of the company.

Distinct business units can be a key element for any firm, as these units have the flexibility to make daily and high level management decisions at the operational level, which frequently yields better decision making. They can take the forms, such as a corporation, association or business trust.

RELATED TERMS
  1. Accounting Entity

    A clearly defined economics unit that is accounted for separately. ...
  2. Interlocking Shareholdings

    A method of creating a unified business group by exchanging shares. ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, ...
  4. Segregation

    Segregation is the separation of an individual or group of individuals ...
  5. Credit Analysis

    A type of analysis an investor or bond portfolio manager performs ...
  6. Segregated Fund

    A type of pool investment that is similar to a mutual fund, but ...
Related Articles
  1. ETFs & Mutual Funds

    Segregated Funds: Investment Protection For Canadian Citizens

    These funds contain the best of all worlds, providing opportunities for market growth with a no-loss guarantee.
  2. Markets

    Is Equity Financing the Right Choice for Your Business?

    Discover the benefits and drawbacks of equity financing for a small business, and learn when equity financing should be used instead of debt financing.
  3. Entrepreneurship & Small Business

    Which Type of Organization Is Best For Your Business?

    Learn the differences between the types of business organizations so you can determine how to best structure your business for tax and liability limitations.
  4. Managing Wealth

    The 4 Most Common Reasons a Small Business Fails

    Discover the most common reasons small businesses fail, including capital formation, management concerns, planning issues and marketing missteps.
  5. Investing

    What’s The Difference Between Shares And Stocks?

    In today’s markets, the distinction between stocks and shares has become blurred.
  6. Investing

    How Market Segments Work

    A market segment is a group of people who share similar qualities.
  7. Personal Finance

    S Corp. Vs. LLC: Which Should I Choose?

    Understand the major distinctions between an S corporation and an LLC, and the important factors to consider when choosing your business structure.
  8. Investing

    Asset Protection For The Business Owner

    Could incorporating your business help protect it? Find out here.
  9. Investing

    How Special Purpose Entities Help Fight Risk

    A special purpose entity, sometimes called a special purpose vehicle, is a legal entity created for one very limited, particular task. Typically, SPEs are subsidiaries of a larger corporation.
  10. Investing

    What is a Firm?

    A firm is a business or organization that sells goods or services on a for-profit basis.
RELATED FAQS
  1. What are some examples of how corporations manage short-term investments?

    Learn how a business owner can protect against significant liability by forming a corporate entity structure, and understand ... Read Answer >>
  2. How do segregated funds differ from mutual funds?

    Mutual funds are investment vehicles that many investors have embraced as a simple and relatively inexpensive method for ... Read Answer >>
  3. Do companies have to pay back their paid-up capital?

    Learn what business structures are available to entrepreneurs, and learn the process for making the most appropriate selection ... Read Answer >>
  4. What are the major types of business in the private-sector and how do they differ ...

    Learn more about how private companies are organized and how large and small companies differ from one another in organization ... Read Answer >>
  5. How can a company or entity maintain an absolute advantage?

    Learn how a company or entity is able to maintain a absolute advantage. Understand the difference between absolute advantage ... Read Answer >>
  6. What types of expenses are factored into autonomous consumption?

    Examine the principles of autonomous consumption in a zero-income scenario and the differences between induced or discretionary ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center